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Create a basis for the establishment of the market links for wood certified in Georgia: identify potential markets (buyers)

Vasiliy Gerasimov Forest advisor November, 2016

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Contents

Background ............................................................................................................................................. 3

List of abbreviations ............................................................................................................................... 5

1. Wood products which can be produced and certified in Georgia and exported……………………..6

1.1. General information on the forest sector of Georgia.................................................................... 6

1.2. Certification prospects................................................................................................................ 10

1.3. Search of potential manufacturers of FSC certified products .................................................... 11

2. Potential buyers of certified and/or controlled forest products from Georgia .................................. 14

2.1. Trends of forest products import in Europe and Turkey ............................................................ 14

2.2. Search of companies – potential buyers of certified products ................................................... 17

2.3. Survey procedure........................................................................................................................ 19

2.4. Survey results ............................................................................................................................. 20

Conclusions and recommendations....................................................................................................... 22

Refenences ............................................................................................................................................ 24

Appendix 1 ............................................................................................................................................ 25

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Background

The European Union (EU) funded “European Neighborhood and Partnership Instrument (ENPI) East

Countries Forest Law Enforcement and Governance (FLEG) II Program” (the “Program”) is aimed to

support the participating countries strengthen forest governance through enhancing their forest

policy, legislation and institutional arrangements, and implementing sustainable forest management

models on a pilot basis. The Program is implemented in Armenia, Azerbaijan, Belarus, Georgia,

Moldova, Ukraine, and the Russian Federation, in the period 2013-2016.

The promotion of voluntary forest certification (VFC) is one of the important components of the FLEG

II Program. VFC is a market-based tool used for achieving sustainable forestry. It involves

assessment of the quality of forest management by a third party according to pre-defined standards

of sustainability. Certificate is awarded, if the forest management meets these sustainability

requirements.

Georgia has a great variety of woodland habitats. Area covered by forests is nearly three million ha,

or some 40% of the country’s entire territory. Excessive and uncontrolled logging has reduced the

average crown cover to a critical level. The percentage of the woodland areas where the crown

cover has been already depleted below the critical level (i.e. 50%) has reached 55% of the national

total. At the same time, some primeval, high conservation value forests remain intact in Georgia.

Along with some other oldest ecosystems in other parts of the globe, they represent one of the last

remaining intact forests in the temperate zone of Earth. Georgian forests play a vital ecological role

at local, regional, and global level and have significant historical, aesthetic, spiritual, cultural, and

socio-economic value. Many rural communities are almost entirely dependent on forests (for

firewood, timber, etc).

Deforestation and forest degradation is a very painful theme in the Georgian society. The Georgian

timber industry has long been one of the most corrupt sectors of the national economy. Since the

90s of the last century there have been repeated efforts to conduct reforms in this field, but without

any significant success in terms of improvement of forest condition.

Georgian forests have essential ecological role and socio-economic potential, which create favorable

conditions for forest certification.

WWF-CauPO strives to develop responsible forestry in Georgia and fight with illegal logging. WWF

assumes that implementation of FSC forest certification is one of the effective tools to reach these

aims. Although at present there are no forests voluntarily certified in Georgia, significant steps were

already taken in this direction. Assessment of the potential of forest certification in Georgia has been

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carried out within the framework of FLEG II Program. The assessment has demonstrated that under

certain pre-conditions, VFC might be feasible in the country.

Certification means additional responsibilities and costs for companies. That is why it is very

important to make sure that there are buyers of certified timber and paper products and to determine

potential benefits from certification of the products already before certification process.

Objectives of the study:

Key objectives of this study are to: a) to provide improved information on estimated market potential

for VFC-certified timber in Georgia in the future and b) identify potential buyers of timber to be

certified in the country. The outputs of the Consultant’s work are:

a) the list (with brief descriptions) and volumes (at least at the minimum level) of wood products

which can be produced and certified in Georgia and exported,

b) the list of companies (with addresses, telephones and if possible, names of contact persons)

which might be potentially interested in certified Georgian wood products, with (preferably) the

descriptions and volumes of desired wood products.

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List of abbreviations

AAC – Annual allowable cut

ENPI FLEG – European Neighborhood and Partnership Instrument East Countries Forest Law

Enforcement and Governance

EU – European Union

FAO – Food and Agriculture Organization of the United Nations

FSC – Forest Stewardship Council

Ltd. — limited

SLIMF – small or low-intensity managed forests

VFC – voluntary forest certification

WWF-CauPO— World Wide Fund for Nature Caucasus Program office.

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1. Wood products which can be produced and certified in Georgia

and exported

1.1. General information on the forest sector of Georgia

Today, 583 companies are registered in the forest sector of Georgia. As shown in figure 1, the vast

majority of these companies are furniture manufacturers. Only 8% of companies are involved in

timber harvesting.

Figure 1. Georgia forest sector companies’ breakdown by activity types (Georgian Civil

Registry, 2016)

There are 29 timber harvesting companies (license holders) in Georgia; over 90% of all AAC is

accumulated by ten largest companies (figure 2).

.

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Figure 2. Georgia timber harvesting companies’ breakdown by harvesting volumes (data

provided by the National Forestry Agency in 2016).

Information about largest logging and wood processing companies operating in Georgia is presented

in table 1.

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Table 1. Largest logging and/or wood processing companies of Georgia: areas under long-

term wood use license (up to 20 years) and annual allowable cut volumes (data provided by

the National Forestry Agency in 2016).

Company name Licensed area AAC

ha % m3 %

Ltd Georgia Wood and Industrial Development Company

84,263 58.34% 88,034 57.80%

Ltd Guria jf 7,213 4.99% 11,022 7.24%

Ltd Georgian Forest 4,920 3.41% 10,400 6.83%

Ltd Qartuli Group 9,424 6.52% 7,500 4.92%

Ltd Akhaltsikes Shfal-sazhghenti qarkhana 8,343 5.78% 6,667 4.38%

Ltd Tao 5,584 3.87% 3,840 2.52%

Ltd Ir Turi 413 0.29% 3,368 2.21%

Raguli Tabatadze 5,681 3.93% 2,653 1.74%

Ltd Bemoni 1,763 1.22% 2,500 1.64%

Ltd Rioni Wood 630 0.44% 2,161 1.42%

Other 16,209 11.22% 14,174 9.31%

Timber and paper products are sold on the domestic market, as well as on the markets of the

neighboring countries: Turkey, Armenia, Azerbaijan, Iran and others. According the Food and

Agriculture Organization of the United Nations (FAO), main export products are sawnwood,

particleboard, wood-based panels and fiberboard (figure 3). Export of roundwood from Georgia is

prohibited.

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Figure 3. Forestry production and trade (export value, 1,000 US$, Food And

Agriculture Organization Of The United Nations Statistics Division)

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1.2. Certification prospects

The obtaining of an FSC certificate means that a company creates perspectives, as outlined below:

To enter international environmentally sensitive markets of Europe, America and Asia with

certified products and to gain recognition

To increase the investment attractiveness of the business and capitalization level of the

company itself

To improve the company’s reputation on the local and regional levels

To get the opportunity to use the FSC trademark, showing that these products are produced

as a result of legal and responsible forest use

More beneficial pricing policy in case of long-term contracts for FSC certified products

supplies

Getting access to a convenient and efficient search tool of FSC certified products “FSC

Marketplace” for the entire world.

However, certification process requires significant financial and time expenditures. These costs are

connected not only with payment for the work of the certification authority, but also with the

preparation and conducting of audit and bringing forest management levels to the standards required

by FSC. That is why only large companies could be potential manufacturers of certified products in

Georgia, as they would be able to invest in certification and production of such volumes of goods,

the selling of which would allow the compensating of certification costs later on.

Later on, after the first certificates are obtained in Georgia and experience of preparation for

certification in the country is gained, it will be possible to consider certification of smaller companies,

using SLIMF schemes.

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Brief information about SLIMF

FSC defines a small producer in terms of the area of their forests or the volume of timber they

harvest each year. A small or low-intensity managed forest, or SLIMF, can qualify for

streamlined auditing procedures that reduce the cost of the audit by, for example, reducing the

sampling in the audit. The procedures also allow for desk-based audits in years where a small

producer has not harvested. FSC has eligibility guidelines for SLIMFs that certification bodies

use to determine if a forest is eligible or not.

Which forests can achieve certification under these streamlined procedures?

To achieve certification under streamlined procedures for SLIMFs, a forest management unit

has to be either 'small' or 'low intensity' according to the definitions of FSC.

In general, a forest management unit is classified as small in area when it is less than 100

hectares. However, FSC National Offices can apply to increase this maximum to 1,000

hectares.

In all countries, forest management units may be classified as low intensity when they comply

with at least one of the following two criteria:

The harvesting rate is less than 20% of the mean annual growth in timber (Mean Annual

Increment or MAI), AND the annual harvest is no more than 5,000 m3.

The forest is managed exclusively for non-timber forest products.

The official policy on eligibility of small and low intensity managed forests may be seen at

https://ic.fsc.org/en/smallholders/certification-01/slimf-certification.

1.3. Search of potential manufacturers of FSC certified products

To find potential manufacturers of certified products in Georgia, a questionnaire has been worked

out, consisting of three parts: general information on the company, information on operating activities

and interest in certification. The questionnaire form is given in Appendix 1.

Answers from three companies have been received. Main findings are given in the table 2.

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Table 2. General information of interviewed logging companies

Company name Harvesting volume in 2015, м3

Including beech (Fagus orientalis),

м3 Products

Interest in certification

Ltd. “Georgia Wood and Industrial Development Co”

17,000 15,000 - planks (beech) - planks (coniferous)

yes

Ltd. “Akhaltsikes Shfal-sazhghenti qarkhana”

4,414 -

- railway sleepers - beams - planks - roof fastening (small size) - slab

no

Ltd. “Wood Export” 3,638 3,339.8 - planks - details

no

Based on survey results, only one company - Ltd. “Georgia Wood and Industrial Development Co”,

part of Hualing Group (China), is interested in certification.

Brief information about Hualing Group

Hualing Group significantly contributes to development of Georgian wood industry. In 2008, the

company obtained logging and wood processing license for 20 years with the right to annually cut

and process 88,000 m3 of wood. At present, actual annual harvesting volume is 30,000 m3 which

is much less than the allowable volume. Thus, prospects and potential of further development are

promising.

As the biggest investor in Georgian wood industry, Hualing Group enjoys preferential policies and

has quite strong capabilities. Company utilizes coordinated one-stop service wood recycling

system, including wood cutting, processing, furniture manufacturing and exporting free of tax from

the free industrial zone of Kutaisi. Kutaisi furniture factory occupies an area of 20,000 m2; the

furniture exhibition hall is 2,500 m2.

Timber is exported from Poti port, which is located near the free industrial zone. About 95% of

timber is exported to Central Asia, Egypt, Iran, Iraq and the United Arab Emirates and the

remaining 5% is sold on domestic market. Furthermore, the end product of timber is exported to

Turkey, Armenia, China and United Arab Emirates (Dubai).

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Companies’ low interest in certification and entrance to new markets is connected with sufficient

capacities of the domestic market and markets of the neighboring countries (Turkey, CIS countries,

Armenia (small volume), Azerbaijan (small volumes), and other countries), which do not require FSC

(or similar other) certificate.

Despite this, in case of financial interest and motivation, it is assumed that most companies which

have responded to the inquiry (and also those which have not), would seriously consider the VFC as

an option. Consequently, the potential of wood production of the companies which participated in the

survey is as follows:

Softwood sawn timber (planks) up to 6,000 m3 a year

Oriental beech (Fagus orientalis) sawn timber (planks) up to 17,000 m3

Wood details of oriental beech up to 700 m3

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2. Potential buyers of certified and/or controlled forest products

from Georgia

2.1. Trends of forest products import in Europe and Turkey

World timber trade is developing in the context of increasing consumption volumes. The world’s

leading timber importers are countries of Asian and North-American regions. The market shares of

imported wood and wood products are as follows: China (21%), Japan (6.2%), USA (16.4%), Great

Britain (4.5%), Italy (3.8%), Egypt (3.7%), Germany (3.6%), Thailand (2.1%) and 2% of the foreign

market belong to France and Uzbekistan.

The European forest sector holds a significant place in the world’s forest community. Its share

accounts for 14.6% of the world’s production of roundwood, 25.9% of sawn timber, 12.3% of

plywood, 43.1% of chipboard, 28.8% of fiberboard, 29.1% of paper and cardboard.

According to FAO, the largest wood importers in Europe are Great Britain and Italy. The main

supplier of softwood timber is Sweden (48%), increasing its supplies by about 4% each year.

The main growth driver for the world trade volumes today is the increase of the wood consumption

around the world and this trend will remain in the world market in the next few years.

The EU’s wood-based industries cover a range of downstream activities, including woodworking

industries, large parts of the furniture industry, pulp and paper manufacturing and converting

industries, and the printing industry. Together, some 438,000 enterprises were active in wood-based

industries across the EU; they represented more than one fifth (20.1 %) of manufacturing enterprises

across the EU, highlighting that - with the exception of pulp and paper manufacturing that is

characterized by economies of scale - many downstream wood-based industries had a relatively

high number of small or medium-sized enterprises.

Table 3. Main indicators for wood-based industries, EU, 2005 and 2012 (Eurostat, 2016)

Activity (NACE Rev.2)

Number of

enterprises

(1,000)

Gross value

added at factor

cost (EUR billion)

Number of persons

employed (1,000)

2005 2012 2005 2012 2005 2012

Manufacturing 2,183 2,100 1,668 1,620 34,185 30,000

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Wood-based industries 472 438 159 132 4,310 3,404

Manufacture of wood and wood products 188 178 36 30 1,292 1,001

Manufacture of pulp, paper, and paper products 21 20 46 42 757 649

Printing and service activities related to printing 133 117 41 31 978 755

Manufacture of furniture 130 124 36 28 1,284 999

The economic weight of the wood-based industries in the EU as measured by EUR 132 billion of

gross value added was equivalent to 8.1 % of the manufacturing total in 2012. The distribution of

value added across each of the three wood-based activities is presented in Table 3 above. Within

the EU’s wood-based industries, the highest share was recorded for pulp, paper and paper products

manufacturing (32 % or EUR 42 billion), the other three sectors had nearly equal shares — printing

and service activities related to printing presented 24 % of the gross value added of wood based

industries, manufacturing of wood and wood products - 23 % and manufacture of furniture - 22 % in

2012.

Experts believe that the forthcoming shift to sustainable economy in Europe will have a positive

effect on the development of the whole forest sector in the nearest future. Measures of governmental

regulation of wood imports in Europe will contribute to stable development of the world market.

Therefore, EU countries are a promising market for timber trade and they can be interested in timber

from Georgia.

Turkey is also a potential customer for forest products from Georgia, apart from Europe.

Timber processing industry in Turkey is presented mainly by small private sawmills. It does not hold

a big place in the country’s economy, but it is considered as an important driver of social

development of the rural regions (protection from unemployment, income leveling). Starting from

1993, state owned timber processing mills were quickly privatized and even though some companies

have been upgraded, still main objectives of the privatization (investment raising, technologies

updating, increase of production efficiency) have not been reached. The following factors should be

considered as the ones constraining the development of the timber processing sector in Turkey:

lack of commercial wood,

construction slowdown,

increasing use of materials replacing wood,

fluctuation of financial markets,

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high cost of logging at remote hard-to-get areas,

investment outflow to Eastern European countries and CIS countries, as the latter have

advantages in terms of availability of raw materials, low manpower cost and high skills.

The positive aspects in Turkey include fast reconstruction of consumption structure, growth of

population, urbanization, large and dynamic domestic market.

Timber production – around 10 million m3 per year has a tendency towards decreasing because

consumption is reducing as all-wood goods are replaced with wood boards and wood substitutes.

Major part of sawmills are small workshops located in the rural area. However, their total number is

gradually reducing because of consolidation and integration (for example, with furniture production).

Production process is improving, range of products is updating and getting wider, quality of the

products is getting better.

Chipboard production, mainly focused on the domestic market, started to reduce after a period of

stable development (before 1996). In 2000 it was measured at two million m3. Economic recession of

2001 resulted in shutdown of 9 mills out of 24, which was equal to taking out capacities for

production of 400 thousand m3 of chipboard per year. By 2005 it was planned to increase production

volume by 25% due to introduction of investors incentive system.

Fiberboard production has a huge potential and, notwithstanding the economic recession, it grows

fast. Due to expanding investments and incentives for investors, it is expected that fiberboard

production will double by 2005 and will reach 1.3 million m3 per year.

Plywood production, which remained at the level of 60 thousand m3 from year to year, is decreasing.

At the same time plywood imports increase, also from Ukraine (Ukraine exported 2.3 times more

plywood to Turkey than in 2001). Plywood consumption remains at high levels though there are

substitutes. The same trends are typical for veneer production, consumption and trade.

Paper production is one of the fastest growing sectors of the Turkish economy and is represented by

36 paper and cardboard mills. Five mills are state owned, four – multinational and the rest are

private companies. The share of state companies in the total production volume (at present is

approximately 25%) is decreasing which is connected with the competitiveness loss because of the

lack of investments into the technical upgrading. Development of this sector is provided by private

business. Production of paper and cardboard increased from 0.9 million tons in 1992 up to 1.6

million tons in 2000 (growth – 66%). Consumption increased twice within the same period – from 1.2

million tons to 2.5 million tons and reached 38 kg per capita per year. According to experts’

estimates, this sector has a big growth potential. Pulp production, major part of which belongs to the

state, has not gone through significant changes. Annual production of all pulp grades accounts for

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470 thousand tons at consumption equal to 1.1-1.5 million tons. No significant changes are expected

in pulp production in the nearest future.

Import of the Ukrainian wood to Turkey, mainly saw logs, grew fast by end-1990s: in 1998 it was

equal to 10.8, and in 2000 it was already 24.3 million USD. Because of the recession of 2001 many

companies, focused on the Turkish market, were in a difficult situation: the volume of the Ukrainian

export to Turkey dropped down to 8.4 million USD, which was almost three times less than

maximum. In 2002 it started to settle down.

In Turkey, unlike some neighboring countries (Armenia, Azerbaijan and Georgia), there are

companies certifying their products according to FSC. That is why Turkey is a potential buyer of

certified forest products.

2.2. Search of companies – potential buyers of certified products

The next stage of this work involved the search of potential buyers of certified products. In order to

select companies really interested in certified products, an FSC database (info.fsc.org) was used,

allowing to make sorting by requested parameters. The sorting was made by the following

parameters.

1. Country (EU timber importing countries, countries with big turnover of forest products,

Turkey).

2. Status (valid only)

3. Product (for example, W8-wood panels, W12-indoor furniture and others)

After preliminary selection, company websites were visited to verify information about the company

provided at info.fsc.org website.

Additional search was made in Google using search queries such as “purchasing certified forest

products” (figures 4 and 5).

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Figure 4. Certificate search at info.fsc.org

Around 80 companies have been selected. The main focus has been made on importing countries

(Great Britain, Italy) and countries with big wood turnover (Switzerland, Poland). All certified Turkish

companies (6) and international companies IKEA and Leroy Merlin got into the selection.

Geographical breakdown of the companies is shown in figure 5.

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Figure 5. Companies, selected as a potential buyers

2.3. Survey procedure

The survey was conducted by sending letters to e-mail addresses of the companies. If a separate

address of a procurement manager was provided in the contact information of the company, the

letter was sent to this address. If there was no separate e-mail address, than the letter was sent to a

common address of the company with a remark that it should be addressed to a procurement

manager.

Some companies have specific forms for potential suppliers at their websites. But such forms should

be filled by official representatives of the suppliers (but not by external consultants).

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2.4. Survey results

Only two responses have been received during this survey.

One from Perichem Trading Inc. in Turkey (Ercan Topçu, Perichem Trading Inc., Levent 193 Plaza,

Büyükdere Cad., No:193, K:2, Levent/İstanbul 34394 Türkiye, t. +90 212 371 47 49, f. +90 212 374

46 00, m. +90 536 388 88 67, ercantopcu@perichem.com).

Perichem Trading Inc. in Turkey is interested in buying certified wood products and ready to discuss

the potential business.

Brief information about Perichem company

Perichem is a global trading company headquartered in Toronto, Canada with representative offices

in Sao Paolo, Moscow, New Delhi and Istanbul. Perichem primiarily trades wood pulp, paper,

mineral fertilizers and petrochemicals and has extensive experience in purchasing, transporting, and

financing products. On the official web-site of the company (http://www.perichem.com/) is mentioned

that they are FSC certified traders.

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Another response was received from Evgeniy Zabubenin, IKEA Forest resources manager. Here is a

quotation:

“It’s difficult for me to evaluate the possibility of purchasing raw materials or products from Georgia.

I’ll try to explain why. IKEA operates within the frames of corporate standards and all procurement

activities of the Company are strictly standardized. Every country, where wood material comes from,

is evaluated from the point of view of potential and risks. As far as I know, IKEA furniture suppliers

have never purchased wood material in Georgia before. However, I venture to suggest that it will be

ranked together with Russia, Ukraine, Turkey, Serbia and Romania as a country with high risk of

illegally harvested wood. According to standards requirements, IKEA suppliers are allowed to buy

only FSC certified materials with FSC 100% and FSC Mix Credit labels when it comes to high-risk

countries. At this stage material purchasing is not possible as there is no FSC certification.

Controlled wood is not recognized as FSC certified wood.

If we assume that forests in Georgia will be FSC certified than there is another question, who will buy

the materials. It’s important for business to understand the logistics of supplies. The nearest

countries where IKEA furniture is produced are Russia and Turkey.

We do not have actively running business in the south of Russia because major production is

located close to consumer markets around Moscow, Saint Petersburg and Kirov region in the east.

We are trying to develop beech business in the Caucasus region (Krasnodarsky Kray, Stavropolsky

Kray and Adygea Republic), but we need to certify at least one forest lease holder according to FSC

for this. By the way, WWF Russia is actively involved in this process.

Speaking about Turkey, wood processing business is not actively developed here and I don’t have

complete information on its potential and needs as main productions are located in the western part,

closer to major European markets».

In addition to that, verbal discussion has been held with the representative of the forest service of

Saxony (Germany). During this discussion it was found out that Saxony forests are not certified

according to FSC system, but they are PEFC certified. At the same time some other lands of

Germany do not certify their forests according to any other systems. The main reason – no benefits

from certification with additional expenditures requested. According to the speaker, having certificate

does not improve products competitiveness and does not increase their price on the market

compared with usual (uncertified) products. There has been no single request for a certificate from

customers when selling goods on the domestic market and exporting to Poland. That’s why it was

decided that it does not make sense to invest in certification.

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Conclusions and recommendations

1. Today low interest of forest products manufacturers in voluntary forest certification in Georgia is

obvious. It is related to sufficient demand on domestic market and markets of neighbor countries,

where certificate is not requested. Therefore, improvement of environmental reputation of a company

can become the main motivation towards certification in large companies (for example Georgia

Wood and Industrial Development Company Ltd). To stimulate smaller companies to do certification

it is necessary to guarantee assistance in preparation for audit.

2. Existence of certificate probably will open new markets for the company, but it does not guarantee

receiving higher profit, which will compensate certification costs, for this reason it is important to

support companies during certification. This support can have financial character or non-financial,

for example, assistance in preparations to certification, recruitment of consultants and so on.

Besides state mechanisms of support for certified companies can be worked out.

3. Only one response about the readiness to buy certified products has been received in reply to

approximately 80 inquiries to the companies in Europe and Turkey. This means that there is no

shortage in certified wood on the European forest and paper products market (this is also proved by

the data received from the analyses of the different information sources). At the same time it doesn’t

mean that it is impossible to sell timber to Europe. But for a true search of customers, more detailed

and targeted inquiry to the companies with commercial offer (and already certified timber) is needed.

4. It is easier to find a customer for certified products among large international companies (for

example, Perichem company, IKEA), because they have higher quality standards. For example,

IKEA is constantly increasing the share of certified materials in the total volume and they have an

ambitious goal to reach 100%. Moreover IKEA supports projects, aimed at sustainable forest

management development, and if there will be an interest in wood from Georgia, it can help to

develop certification. Nevertheless, prior to this, it is necessary to study the requirements to

procurement and to estimate the related logistics.

5. When advertising/marketing the Georgian wood products, it is necessary to put a stress on a

quality of an oriental beech wood (Fagus orientalis) and its advantages in comparison with other

species, growing in Europe.

6. It is necessary to pay special attention to products marketing. Today none of the seven largest

timber harvesting companies in Georgia has its own website, which is very important from the point

of view of sharing information with potential customers and products promotion.

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7. Unfortunately, at present the probability of forest management certification of all timber harvesting

companies in Georgia is very low. Experience of different countries of the world shows that

certification of forest areas contributes to improvement of forest management quality of responsible

forest users, and it has almost no influence on the rest. Therefore certification of some of the forest

operators cannot help to solve all problems of the forest sector, and namely to reduce the volumes of

illegal logging, or the number of violations of environmental requirements. For this reason, it is

important to improve forestry legislation and law enforcement at a country level, in parallel with

efforts to promote certification development.

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Refenences

1. Statistics Explained (http://ec.europa.eu/eurostat/statistics-explained/)

2. Food and agriculture Organization of the United Nations (www.fao.org)

3. Forestry statistics details. Eurostat Statistic Explained, 2015.

4. FSC public search (www.info.fsc.org)

5. National Biodiveristy Strategy and Action Plan of Georgia (2014-2020). Approved by the

Governmental Decree # 343, 8 May 2014.

6. Merab Machavariani, Analysis of Voluntary Forest Certification Potential within Forestry

Sector of Georgia, ENPI FLEG Program, 2014.

7. Total economic valuation of Georgia forests. The World Bank. T. Arin, J. Siry, 2000.

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Appendix 1

Questionnaire for potential manufacturers of FSC-certified products in Georgia

1. General information about the Company

1.1. Company name

1.2. Contact person

Please, give the name and position in the company

1.3. Preferable way of communication

E-mail

Telephone

Skype

2. Information on timber harvesting activities of the Company

2.1. Total volume of timber harvesting, m3

2.2. Softwood harvesting volume, m3

2.3. Hardwood harvesting volume, m3

2.4. Beech (Fagus orientalis) harvesting volume, m3

3. Information on timber processing

3.1. Do you have your own timber processing

Please, answer YES or NO

3.2. If you answer YES to question 3.1., please

specify what is the share of harvested wood that

you process yourself, %

3.3. If you process wood yourself, what is the final

product that you sell and what is the volume, m3

3.4. If you convert yourself, where do you sell your

final products and what are the volumes, m3

Please specify the volume, as you prefer, in m3 or

% from the total volume of the goods

Market Prod 1 Prod 2 Prod 3

Domestic market

Turkey

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China

EU

Russia

Former Soviet

republics

Others

4. Attitude towards certification

Please, answer YES or NO to all questions in this section

4.1. Have you been contacted by customers,

interested in purchasing of certified products

4.2. Are you interested in selling forest products on

the EU market

4.3. Are you ready to undertake additional

responsibilities, for example, to certify your timber in

accordance with international standards, to be able

to expand into new markets?

4.4. To enter European countries market it is

requested to prove the legal origin of timber.

Voluntary forest certification is one of the ways to

solve this issue. It is necessary to pass an audit to

prove the compliance of the forest management

quality. We are ready to speak in more details about

the certification (by skype) within the frames of ENPI

project. Would it be interesting for you?